The Splits from page 21 statutory construction , the dissent stated that , “ here , it is consistent with the text of the Bankruptcy Code , directly relevant to the case at hand , and unequivocally confirms that appreciation in the value of the [ debtors ’] home should not become part of the converted estate .” Id . at 1064 .
Finally , in the Eighth Circuit , where this discussion began , the Circuit Court directly addressed this issue in In re Goetz , 95 F . 4th 584 ( 8th Cir . 2024 ). In this case , at the time a Chapter 13 was filed , there was no equity in the debtor ’ s home . However , almost two years later , when the case was converted , the home had appreciated by $ 75,000 , and the mortgage had been paid down by a small amount , leaving equity for creditors . Making the point that the debtor would not be liable for any decreases in equity during the Chapter 13 case as persuasive that the debtor should likewise not benefit from any increases in equity , the Eighth Circuit rejected the “ complete snapshot rule ” of evaluating property of the estate as of the date of filing and also found “ unpersuasive ” the debtor ’ s appeal to the legislative history of Section 348 ( f )( 1 ). Id . at 591 . The Court said : “ No amount of legislative history can defeat the plain text of the Code .” Id . The Court likewise rejected the argument that “ proceeds ” of property of the estate must exist as of the filing to be included in the later Chapter 7 estate , as the Tenth Circuit had decided , circling back to Potter ’ s point that even future , contingent interests existing as of the time of filing are property of the estate . The Eighth Circuit distinguishes the Tenth Circuit ’ s decision in Barrera because , unlike in the case before them , the debtors sold their home after confirmation of their Chapter 13 plan , but before conversion .
So where does this leave the law on this point ? It matters not only which circuit the debtor files in , but suggests several issues that must be considered by debtor ’ s counsel , including whether a Chapter 13 is the best avenue if there is no current equity in the debtor ’ s home , and whether if a plan is confirmed and the value of the home appreciates , the home should be sold while in Chapter 13 , if it looks unlikely that the plan can be fully consummated . What is troubling in all the Circuit decisions , even the Tenth Circuit decision , is , as noted in the Ninth Circuit dissent , where the legislative history is very clear in response to a similar circuit split Congress was trying to correct , what level of ambiguity in the language of the statute is necessary to consider Congressional intent . We hope - perhaps vainly - that Congress will be more careful in the language it uses in weighing in on similar circuit splits in the future .
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into tears and even hugged the PBRC staff . She still had a long road to financial and housing stability , but the resolution of this debt was a huge relief and offered a first step toward a better situation .
• Legal Aid Society of San Diego : Debtor came to LASSD while she was living in a safe-housing facility after fleeing an abusive relationship . She had a large amount of debt for a young person , much of it attributable to prior bad relationships and difficulty in understanding financial matters due to a mental disability . These issues were compounded by having a limited income consisting solely of SSDI . LASSD prepared a Chapter 7 bankruptcy petition and successfully guided her through the case .
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